Question
Data concerning a company`s single product is as follows: Rs per Unit Selling price 6.00 Variable production cost 1.20 Variable selling cost 0.40 Fixed production
Data concerning a company`s single product is as follows:
Rs per Unit
Selling price 6.00
Variable production cost 1.20
Variable selling cost 0.40
Fixed production cost 4.00
Fixed selling cost 0.80
Budgeted production and sales for the year are 10,000 units.
Required:
(a) What is the company`s break-even point, to the nearest whole unit?
(4 marks)
It is now expected that the variable production cost per unit and the selling
price per unit will each increase by 10%, and fixed production costs will rise
by 25%.
(b) What will be the new break-even point, to the nearest whole unit?
(8 marks)
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